Vacancy Fluctuations in a Macroeconomic Model with a Strategic Labor Input Target

Abstract

This study investigates the effects of changes in job-filling and job-separation rates on economic fluctuations using an efficiency wage model. It introduces a relationship between labor input and the strategic labor input target into the model. This framework enables us to analyze situations in which vacancies exist, along with employment and unemployment. In this study, the outward shift in the Beveridge curve is attributed to a decline in the job-filling rate and/or an increase in the job-separation rate. An analysis of responses to a positive productivity shock indicates that the changes in vacancies in response to the shock do not necessarily lead to employment changes but depend on the job-separation rate. This finding highlights the need to examine not only the change in vacancies but also the job-separation rate when discussing economic policies.